Prior Label Approval System: Generic Label Approval, 75809-75825 [2011-30992]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food Safety and Inspection Service

[Federal Register Volume 76, Number 233 (Monday, December 5, 2011)]
[Proposed Rules]
[Pages 75809-75825]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30992]


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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 316, 317, 320, 331, 354, 355, 381, 412, and 424

[Docket No. 99-021P; FDMS Docket Number FSIS-2005-0016]
RIN 0583-AC59


Prior Label Approval System: Generic Label Approval

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to 
amend the meat and poultry products inspection regulations to expand 
the circumstances in which FSIS will generically approve the labels of 
meat and poultry products. The Agency also is proposing to combine the 
regulations that provide for the approval of labels for meat products 
and poultry products into a new CFR part.

DATES: Comments must be received on or before February 3, 2012.

ADDRESSES: FSIS invites interested persons to submit comments on this 
proposed rule. Comments may be submitted by either of the following 
methods:
     Federal eRulemaking Portal: This Web site provides the 
ability to type short comments directly into the comment field on this 
Web page or attach a file for lengthier comments. Go to https://www.regulations.gov. Follow the online instructions at that site for 
submitting comments.
     Mail, including diskettes or CD-ROMs, and hand- or 
courier-delivered items: Send to U.S. Department of Agriculture (USDA), 
FSIS, OPPD, RIMD, Docket Room, Patriots Plaza 3, 1400 Independence 
Avenue SW., Mailstop 3782, 8-163A, Washington, DC 20250-3700.
    Instructions: All items submitted by mail or electronic mail must 
include the Agency name and docket number FSIS-2005-0016. Comments 
received in response to this docket will be made available for public 
inspection and posted without change, including any personal 
information provided, to https://www.regulations.gov.
    Docket: For access to background documents or comments received, go 
to the FSIS Docket Room at the address listed above between 8 a.m. and 
4:30 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Jeff Canavan, Food Technologist, 
Labeling and Program Delivery Division, Office of Policy and Program 
Development, Food Safety and Inspection Service, U.S. Department of 
Agriculture, Beltsville, MD 20705-5273; Telephone (301) 504-0879; Fax 
(301) 504-0872.

SUPPLEMENTARY INFORMATION: 

Background

Introduction

    The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and 
the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.) 
direct the Secretary of Agriculture to maintain meat and poultry 
product inspection programs designed to assure consumers that meat and 
poultry products distributed to them (including imports) are safe, 
wholesome, not adulterated, and properly marked, labeled, and packaged. 
Section 2 of the FMIA (21 U.S.C. 602) and section 2 of the PPIA (21 
U.S.C. 451) state that unwholesome, adulterated, or misbranded meat or 
meat food products and poultry or poultry food products are injurious 
to the public welfare; destroy markets for wholesome, not adulterated, 
and properly marked, labeled, and packaged products; and result in 
sundry losses to producers and processors of meat and poultry products, 
as well as injury to consumers. Therefore, Congress has granted to the 
Secretary broad authority to protect consumers' health and welfare.
    Section 7(d) of the FMIA (21 U.S.C. 607(d)) states: ``No article 
subject to this title shall be sold or offered for sale by any person, 
firm, or corporation, in commerce, under any name or other marking or 
labeling which is false or misleading, or in any container of a

[[Page 75810]]

misleading form or size, but established trade names and other marking 
and labeling and containers which are not false or misleading and which 
are approved by the Secretary are permitted.'' The PPIA contains 
similar language in section 8(c) (21 U.S.C. 457(c)).
    The Department's longstanding interpretation of these provisions is 
that they require that the Secretary of Agriculture or his or her 
representative approve all labels to be used on federally inspected and 
passed, and imported, meat and poultry products before the products are 
distributed in commerce. Without approved labels, meat and poultry 
products may not be sold, offered for sale, or otherwise distributed in 
commerce.
    These prior label approval provisions also apply to establishments 
that do business solely within designated States (see 21 U.S.C. 451 and 
602). A State is designated if it does not have, or is not effectively 
enforcing, with respect to establishments within its jurisdiction at 
which livestock or poultry are slaughtered, or at which their carcasses 
or products are prepared for use as human food solely for distribution 
within such State, requirements at least equal to those contained in 
titles I and IV of the FMIA and specified sections of the PPIA (21 
U.S.C. 454(c)(1) and 661(c)(1)). Once a State is designated, the 
inspection requirements of the FMIA and PPIA apply to establishments 
that slaughter livestock and poultry, and prepare or process meat or 
poultry products, solely for distribution within the State.

Current Label Regulations

    There are up to eight features required on most meat and poultry 
labels. The mandatory features are designed to ensure that meat and 
poultry products are accurately and truthfully labeled, and that they 
provide the necessary product information for consumers to make an 
informed purchasing decision. These required features of meat and 
poultry product labels must appear on the immediate containers of 
domestic products (9 CFR part 317, subpart A, and 9 CFR part 381, 
subpart N) and imported products (9 CFR part 327 and 9 CFR part 381, 
subpart T). The meat inspection regulations define an ``immediate 
container'' as the receptacle or other covering in which any product is 
directly contained or wholly or partially enclosed (9 CFR 301.2). The 
poultry products inspection regulations define an ``immediate 
container'' as any consumer package or any other container in which 
poultry products, not consumer packaged, are packed (9 CFR 381.1(b)).
    The required features include: (1) The standardized, common or 
usual, or descriptive name, of the product (9 CFR 317.2(e) and 
381.117); (2) an ingredients statement containing the common or usual 
name of each ingredient of the product listed in descending order of 
predominance (9 CFR 317.2(f) and 381.118); (3) the name and place of 
business of the manufacturer, packer, or distributor (9 CFR 317.2(g) 
and 381.122); (4) an accurate statement of the net quantity of contents 
(9 CFR 317.2(h) and 381.121); (5) the inspection legend, including the 
number of the official establishment (9 CFR 317.2(i) and 381.123); (6) 
a safe handling statement if the product is perishable; e.g., ``Keep 
Frozen'' or ``Keep Refrigerated'' (9 CFR 317.2(k) and 381.125(a)); (7) 
nutrition labeling for applicable meat and poultry products; \1\ and 
(8) safe handling instructions if the meat or poultry component of the 
product is not ready-to-eat (9 CFR 317.2(l) and 381.125(b)). In 
addition, imported meat and poultry products must bear the country of 
origin under the product name in accordance with 9 CFR 327.14(b)(1) and 
381.205(a).
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    \1\ Nutrition labeling is required for heat-treated and multi-
ingredient meat and poultry products. New nutrition labeling 
requirements for ground or chopped meat and poultry products will 
take effect January 1, 2012 (75 FR 82148, Dec. 29, 2010).
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    These mandatory features must be prominently and informatively 
displayed on the principal display panel, the information panel, or 
other surface of the product label. The first six features described 
above, including the labeling of country of origin for imported 
products in accordance with 9 CFR 327.14 and 381.205, have been 
required by the meat and poultry inspection regulations for decades. 
FSIS implemented regulations that require the nutrition labeling of 
cooked or heat-treated multi-ingredient meat and poultry products and 
the display of safe handling instructions in 1993 and 1994, 
respectively. Therefore, industry has had a significant amount of 
experience complying with the regulations for all required label 
features.
    The regulations contain other provisions to ensure that no 
statement, word, picture, design, or device that is false or misleading 
in any particular, or that conveys any false impression, or that gives 
any false indication of origin, identity, or quality, appears in any 
marking or other labeling (9 CFR 317.8 and 381.129). Pursuant to the 
authority contained in section 7(e) of the FMIA (21 U.S.C. 607(e)) and 
section 8(d) of the PPIA (21 U.S.C. 457(d)), the Administrator, FSIS, 
may withhold the use of any marking or labeling that is false or 
misleading, within the meaning of the FMIA or the PPIA and the 
implementing regulations.

Current Prior Label Approval System and the Procedures the Agency 
Employs To Implement It

    In order to ensure that meat and poultry products comply with the 
FMIA and PPIA and their implementing regulations, FSIS conducts a prior 
approval program for labels that are to be used on federally inspected 
meat and poultry products and imported products (see 9 CFR 317.4, 
317.5, 327.14, 381.132, 381.133, 381.134, and 381.205).
    Under the current program, FSIS evaluates sketches of labels for 
approval. A ``sketch label'' is a printer's proof or other version that 
clearly shows all required label features, size, location, and 
indication of final color. To obtain sketch label approval, domestic 
meat and poultry establishments and certified foreign establishments, 
or their representatives, submit sketch labels to FSIS for evaluation, 
except when the label is generically approved by the Agency under 9 CFR 
317.5 or 381.133.
    Meat and poultry establishments and certified foreign 
establishments submit sketch labels accompanied by FSIS Form 7234-1 
(01/08/2008), ``Application for Approval of Labels, Marking or 
Device,'' to the Agency for evaluation. In addition to the required 
label information, any special claims or statements that the 
establishment intends to make (e.g., quality claims, animal production 
raising claims, product origin claims, or nutrient content claims) must 
be included on the label, along with documentation supporting the 
claim. The label application must contain the basic information about 
the establishment and the product, including:
    1. Establishment number;
    2. Product name;
    3. Product formulation;
    4. Processing procedures and handling information;
    4. Firm name and address;
    5. Total available labeling space of the container;
    6. Size of the principal display panel; and
    7. The Hazard Analysis and Critical Control Point category under 
which the establishment is producing the meat or poultry product.
    All such information is evaluated by a technical labeling policy 
expert in FSIS, who is responsible for verifying that sketch labels 
comply with the applicable requirements. A ``final label''

[[Page 75811]]

does not have to be submitted to the Agency for evaluation and 
approval. Since July 1, 1996, meat and poultry establishments and 
certified foreign establishments have been responsible for ensuring 
that the labels that they apply to their meat and poultry products 
comply with Federal regulations. All labels are subject to FSIS 
verification for compliance with Agency regulations to ensure that they 
are accurate, truthful, and not misleading. The management of the 
official establishment or establishment certified under a foreign 
inspection system must maintain a copy of all labels and labeling used, 
along with the product formulation and processing procedures. Such 
records must be made available to any duly authorized representative of 
the Secretary upon request.

Generic Label Approval

    Generic label approval refers to the prior approval of labels or 
modifications to labels by the Agency without submitting such labels to 
FSIS for sketch approval. Generic label approval requires that all 
mandatory label features be in conformance with FSIS regulations (9 CFR 
317.5(a)(1) and 381.133(a)(1)). Although such labels are not submitted 
to FSIS for approval, they are deemed to be approved and, therefore, 
may be applied to product in accordance with the Agency's prior label 
approval system.
    In 1983, FSIS estimated that it evaluated approximately 130,000 
label submissions a year. That year, the Agency promulgated regulations 
that granted limited label approval authority to the Inspector-In-
Charge (IIC) at official establishments and provided generic approval 
to limited types of labels (e.g., labels for raw, single ingredient 
meat and poultry products) (48 FR 11410, March 18, 1983). This generic 
approval did not extend to the labels of the products of certified 
foreign establishments. The rulemaking was intended to reduce the 
number of labels and other labeling submitted for evaluation by FSIS 
and to lessen the paperwork burden on official establishments. The 
general goal was to improve the efficiency of the label approval system 
by streamlining the review process.
    Even with the changes made by the rule, however, the number of 
labels and other labeling submitted to the Agency continued to grow. 
During fiscal year 1991, the Agency processed approximately 167,500 
labels. Of these, 87,500 were final labels, and 60,000 were sketch 
labels that were approved. Approximately 20,000 labels were not 
approved. The Agency did not maintain records on the number of 
temporary approvals or other types of labeling (e.g., insert labeling 
applied at retail) that were evaluated and acted upon by the Agency.
    On March 25, 1992, FSIS published an Advance Notice of Proposed 
Rulemaking (ANPRM) (57 FR 10300, Mar. 25, 1992) on the Agency's prior 
label approval system. The ANPRM presented two options for making 
additional changes to the prior label approval system: (1) Revise the 
system by significantly reducing the scope of review through expansion 
of the categories of generically approved labels and replacing the 
general requirement of FSIS approval of sketch and final labels with 
one for sketch labels only; or (2) replace the system with a system in 
which all labels are generically approved and used without prior 
submission to FSIS for evaluation and approval.
    On November 23, 1993, FSIS published a proposed rule (58 FR 62014) 
to amend the Federal meat and poultry products inspection regulations 
by expanding the types of generically approved labels authorized for 
use on meat and poultry products by official establishments in the 
United States and foreign establishments certified under foreign 
inspection systems. The rule was proposed as a first step in the 
gradual streamlining and modernization of the label approval system. In 
the proposal, the Agency sought comment on a long-term plan to 
implement a system in which all labels are generically approved. After 
reviewing the comments received in response to the proposed rule, and 
in light of FSIS's ongoing reassessment of its labeling policies, FSIS 
decided to proceed with a gradual streamlining and modernization of the 
label approval system.
    On December 29, 1995 (effective July 1, 1996), FSIS published a 
final rule titled ``Prior Label Approval System'' (60 FR 67334). The 
implementing regulations, 9 CFR 317.5 and 381.133, outline the types of 
labels and modifications to labels that are deemed to be approved 
without submission to FSIS, provided that the label displays all 
mandatory label features in conformance with applicable Federal 
regulations.
    FSIS permits official establishments and foreign establishments 
certified by officials of foreign inspection systems to use the 
following generically approved labeling without the submission of 
sketches for evaluation and approval by FSIS:
    1. Labels for a product that has a standard of identity or 
composition as specified in 9 CFR part 319 or part 381, subpart P, or 
is consistent with an informal standard that the Agency has laid out in 
the Food Standards and Labeling Policy Book; does not bear any special 
claims, such as quality claims, nutrient content claims, health claims, 
negative claims, geographical origin claims (except as provided by 9 
CFR 317.5(b)(9)(xxv) and 381.133 (b)(9)(xxviii)), or guarantees; and is 
not a product that is not domestic and labeled in a foreign language;
    2. Labels for raw, single-ingredient products (such as beef steak, 
lamb chops, chicken legs, or turkey breasts) that do not bear special 
claims, such as quality claims, nutrient content claims, health claims, 
negative claims, geographical origin claims, or guarantees, and are not 
products that are not domestic and labeled with a foreign language;
    3. Labels for containers of meat and meat food products and poultry 
products sold under contract specifications to Federal Government 
agencies when such product is not offered for sale to the general 
public, provided that the contract specifications include specific 
requirements with respect to labeling that is made available to the 
IIC;
    4. Labels for shipping containers that contain fully labeled 
immediate containers, provided that the outside container's labels 
comply with 9 CFR 316.13 or 381.127;
    5. Labels for products not intended for human food, provided that 
they comply with 9 CFR part 325 or 9 CFR 381.152(c) and 381.193; and 
labels for poultry heads and feet for export for processing as human 
food if they comply with 9 CFR 381.190(b);
    6. Meat and poultry inspection legends that comply with 9 CFR parts 
312 and 316, and 9 CFR part 381, subpart M;
    7. Inserts, tags, liners, posters, and like devices containing 
printed or graphic matter and for use on, or to be placed within, 
containers and coverings of products, provided such devices contain no 
reference to product and bear no misleading feature;
    8. Labels for consumer test products not intended for sale; and
    9. Labels that were previously approved by FSIS as sketch labels, 
and the final labels were prepared without modification or with the 
following modifications:
    a. All features of the label are proportionately enlarged or 
reduced, provided that all minimum size requirements specified in 
applicable

[[Page 75812]]

regulations are met, and the label is legible;
    b. A substitution of any unit of measurement with its abbreviation 
or the substitution of any abbreviation with its unit of measurement, 
e.g., ``lb.'' for ``pound,'' or ``oz.'' for ``ounce,'' or of the word 
``pound'' for ``lb.'' or ``ounce'' for ``oz.'';
    c. A master or stock label that has been approved from which the 
name and address of the distributor are omitted, and such name and 
address are applied before being used (in such case, the words 
``prepared for'' or similar statement must be shown together with the 
blank space reserved for the insertion of the name and address when 
such labels are offered for approval);
    d. Wrappers or other covers bearing pictorial designs, emblematic 
designs, or illustrations, e.g., floral arrangements, illustrations of 
animals, fireworks, etc., are used with approved labels (the use of 
such designs will not make necessary the application of labeling not 
otherwise required);
    e. A change in the language or the arrangement of directions 
pertaining to the opening of containers or the serving of the product;
    f. The addition, deletion, or amendment of a dated or undated 
coupon, a cents-off statement, cooking instructions, packer product 
code information, or UPC product code information;
    g. Any change in the name or address of the packer, manufacturer, 
or distributor that appears in the signature line;
    h. Any change in net weight, provided the size of the net weight 
statement complies with 9 CFR 317.2 or 381.121;
    i. The addition, deletion, or amendment of recipe suggestions for 
the product;
    j. Any change in punctuation;
    k. Newly assigned or revised establishment numbers for a particular 
establishment for which use of the label has been approved by FSIS;
    l. The addition or deletion of open dating information;
    m. A change in the type of packaging material on which the label is 
printed;
    n. Brand name changes, provided that there are no design changes, 
the brand name does not use a term that connotes quality or other 
product characteristics, the brand name has no geographic significance, 
and the brand name does not affect the name of the product;
    o. The deletion of the word ``new'' on new product labels;
    p. The addition, deletion, or amendment of special handling 
statements, such as ``Keep Refrigerated'' or ``Keep Frozen,'' provided 
that the change is consistent with 9 CFR 317.2(k) or 381.125(a);
    q. The addition of safe handling instructions as required by 9 CFR 
317.2(l) and 381.125(b);
    r. Changes reflecting a change in the quantity of an ingredient 
shown in the formula without a change in the order of predominance 
shown on the label, provided that the change in quantity of ingredients 
complies with any minimum or maximum limits for the use of such 
ingredients prescribed in 9 CFR parts 318, 319, 424, subpart C, and 
381, subpart P;
    s. Changes in the color of the label, provided that sufficient 
contrast and legibility remain;
    t. The addition, deletion, or substitution of the official USDA 
grade shield on labels of poultry products;
    u. A change in the product vignette, provided the change does not 
affect mandatory label information or misrepresent the content of the 
package;
    v. A change in an establishment number by a corporation or parent 
company for an establishment under its ownership;
    w. Changes in nutrition labeling that only involve quantitative 
adjustments to the nutrition labeling information, except for serving 
sizes, provided the nutrition labeling information maintains its 
accuracy and consistency;
    x. Deletion of any claim, and the deletion of non-mandatory 
features or non-mandatory information;
    y. The addition or deletion of a direct translation of the English 
language into a foreign language for products marked ``for export 
only''; and
    z. A country of origin statement on any product label described in 
9 CFR 317.8(b)(40) and 381.129(f) that complies with the requirements 
in these paragraphs.
    With the implementation of the 1995 final rule on July 1, 1996, 
FSIS transferred the responsibility for maintaining labeling records 
from IICs to official establishments in the United States and to 
foreign establishments certified by officials of a foreign inspection 
system. Each record must include a copy of the labeling, the product 
formulation, and processing procedures (9 CFR 320.1(b)(11)). This 
transfer of responsibility was done to be consistent with the record 
keeping requirements of other production related areas, e.g., 
Sanitation (9 CFR 416.16) and Hazard Analysis and Critical Control 
Point (HACCP) Systems (9 CFR 417.5). For example, establishments are 
required to maintain copies of their HACCP plan, hazard analysis, 
records documenting the monitoring of critical control points, and 
sanitation operating procedures. These records must be made available 
to FSIS personnel upon request. Establishments are required to maintain 
records for product formulation and labeling similar to HACCP and 
Sanitation Standard Operating Procedure (SOP) records because 
establishments are responsible for ensuring the accuracy of all final 
labels applied to product.
    To facilitate Agency verification of compliance with regulatory 
labeling requirements, FSIS requires that establishments make labeling 
records available to any authorized USDA official upon request (9 CFR 
320.4). The Agency published FSIS Directive 7221.1, Amendment 1, titled 
``Prior Labeling Approval,'' on August 19, 1996, to provide 
instructions to Federal inspectors on their responsibilities in 
verifying that the modifications to the FSIS food labeling prior 
approval program regulations were implemented effectively and without 
disruption of the inspection process.
    As part of the 1995 final rule, FSIS stated that it intended to 
proceed with the gradual streamlining and modernization of the prior 
label approval system. FSIS anticipated making additional changes after 
it completed an assessment of the modified system.
    FSIS announced that it would sample labels applied by 
establishments under the generic label approval regulations to assess 
compliance with the FMIA and the PPIA (9 CFR 317.5(a)(2) and 
381.133(a)(2)). To effect this sampling, the Agency issued FSIS 
Directive 7221.1, Amendment 1, which instituted a nationally directed 
surveillance plan. Following implementation of the surveillance plan, 
FSIS assessed whether establishments were applying the generic label 
regulations correctly. The Agency brought label discrepancies to the 
attention of establishments for correction when it found them.
    The Agency has used its surveillance to assess compliance trends 
and to determine whether any new labeling regulations or guidance 
materials are needed. FSIS assembled a taskforce of employees to: (1) 
Develop criteria and methods to select labels for sampling; (2) develop 
the appropriate compliance activity to respond to labeling errors; (3) 
develop tracking and reporting systems; and (4) design and implement a 
survey of the effects of the limited generic approvals.
    The results of a survey \2\ showed that 685 of the 1,107 
establishments

[[Page 75813]]

operating at the time of the survey (193 establishments that were 
selected to be surveyed were no longer operating) used generically 
approved labels. Of the 1,513 labels that inspection program personnel 
submitted to FSIS headquarters, 538 were in compliance with all Federal 
regulations and policies, 896 had minor labeling errors (for example, 
insufficient spacing around the declaration of net weight or an error 
in the name of the manufacturer, packer, or distributor) that were not 
of public health or economic significance, and 79 had labeling errors 
that could not be granted a temporary approval without modification 
(e.g., an incomplete product name). Sections 317.4(f) and 381.132(f) of 
Title 9 of the CFR provide for the temporary use of final labels that 
may be deficient under the following conditions: (1) The product label 
does not misrepresent the product; (2) the use of the label does not 
present any potential health, safety, or dietary problems to the 
consumer; (3) denial of use would create an undue economic hardship; 
and (4) an unfair competitive advantage would not result from the 
granting of the temporary approval.
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    \2\ Generic Label Audit System Project (1997-1998).
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Survey Conclusions

    Although 79 of the 1,513 labels that were surveyed had deficiencies 
that could not be granted temporary approval without modification 
(e.g., through the use of pressure sensitive stickers to correct label 
features not in compliance with Federal regulations), FSIS concluded 
that the survey showed that the great majority of establishments 
surveyed could effectively use generically approved labels without 
first submitting sketch labels to FSIS for evaluation and approval. 
Furthermore, the Agency concluded that the results showed enough 
acceptable compliance by establishments for FSIS to confirm that the 
gradual implementation of generic label provisions under the 1995 final 
rule was effective.

Trends Toward Increased Guidance and Transparency of Labeling Policies 
for Industry

    In the years since the survey was conducted and the last major 
change to the generic label regulations was made, the Agency has 
emphasized the importance of providing guidance and outreach to 
industry, trade groups, and consumers. FSIS has posted most of its 
labeling policy information on the Agency's Web site to increase 
accessibility to industry, particularly small businesses. The Labeling 
and Consumer Protection Reference Center was launched as a Web page in 
February 1999. The Web page includes a PowerPoint presentation titled 
``Labeling 101,'' which is used by the Agency as a teaching tool at 
workshops on meat and poultry label requirements. In addition, FSIS has 
on its Web page guidance on animal production claims and on nutrition 
labeling, a glossary of meat and poultry labeling terms, the Food 
Standards and Labeling Policy Book, and questions and answers on 
various topics, such as irradiation and the labeling of ingredients. 
The Web page also includes FSIS Form 7234-1, Application for Approval 
of Labels, Marking and Device, and detailed instructions to assist 
establishments in preparing label applications for submission to FSIS. 
In addition, the Agency's labeling policy Web page contains a guidebook 
that provides information on FSIS labeling requirements, including 
generic approval. Due to these efforts, and because no other evidence 
has been submitted to FSIS to suggest that generically approved 
labeling cannot be successfully applied, FSIS has concluded that 
expanding the types of labeling that is generically approved is 
appropriate at this time.

Proposed Rule

    The provisions of the generic label regulations appear to be 
comprehensive. However, in practical application, they are restrictive 
regarding the types of labels and labeling changes that are considered 
by the Agency to be approved without submitting such labeling to the 
Agency. For example, the label for a non-standardized product, such as 
a pepperoni pizza (bearing no special statements or claims) that was 
sketch approved by FSIS would need to be resubmitted for sketch 
approval if the establishment makes a minor formula change that affects 
the order of predominance in the ingredients statement. This need to 
resubmit exists because the generic label regulations only provide for 
changes to the product formula for non-standardized meat or poultry 
products that have been sketch approved if the order of predominance in 
the ingredients statement does not change. Consequently, the current 
label regulations require industry to submit for approval a significant 
amount of labeling that the Agency believes could successfully be 
generically approved. Expanding the types of labels that can be 
generically approved would lessen the burden on industry to submit 
labels to the Agency, while allowing the Agency to better focus on, and 
direct its resources to, other consumer protection and food safety 
activities.
    FSIS is proposing to amend the meat and poultry products inspection 
regulations (9 CFR 317.5 and 381.133) to expand the circumstances in 
which the labels of meat and poultry products will be deemed to be 
generically approved by FSIS. If adopted, the new generic label 
regulations for meat and poultry will be placed in a new part 412 in 
Title 9. The Agency is proposing to combine the regulations that 
provide for the approval of labels for meat products and for poultry 
products (9 CFR 317.4 and 381.132) into part 412. This proposal, if 
adopted, will modernize the regulations by expanding the types of 
labels that FSIS considers generically approved without prior 
submission to the Agency. This rulemaking will also streamline the 
regulations by placing all the label approval regulations for meat and 
poultry products in one part in Title 9.
    Under the proposed rule, establishments that apply generically 
approved labels without prior submission to the Agency will have the 
responsibility of ensuring that all basic required label features 
(i.e., product name, safe handling statement, ingredients statement, 
address line, net weight, legend, safe handling instructions, nutrition 
labeling for multi-ingredient products, as well as the country of 
origin and mark of inspection of the foreign system for imported 
products) appear on their meat or poultry product labels in accordance 
with Federal regulations.
    If this proposal is adopted, FSIS will require establishments to 
submit for evaluation only certain types of labeling, e.g., labels for 
temporary approval, labels for products produced under religious 
exemption, labels for export with labeling deviations, and claims and 
special statements intended for use on labels. FSIS will continue to 
require the submission of such labels and special statements and claims 
because they are more likely to present significant policy issues that 
have health or economic significance. Examples of labeling that will 
need to be submitted for evaluation and approval before use if this 
proposal is adopted are: (1) Labels for chicken produced under Buddhist 
exemption; (2) labels for beef intestine produced for export to China 
that identify the product as ``beef casings,'' and (3) labels for 
temporary use that do not list all ingredients in the correct order of 
predominance.
    Examples of special statements and claims for use on labels are: 
(1) Claims relating a product's nutrient content to a health or a 
disease condition; (2) statements that identify a product as 
``organic'' or containing organic

[[Page 75814]]

ingredients; (3) claims regarding meat and poultry production 
practices; (4) claims that are undefined in FSIS regulations, such as 
``gluten free;'' and (5) instructional or disclaimer statements 
concerning pathogens, e.g., ``for cooking only'' or ``not tested for E. 
coli O157:H7;'' and (6) statements that identify a product as 
``natural.'' A special statement or claim may be submitted to the 
Agency for approval in the context of a final label; however, FSIS will 
not evaluate the mandatory features (e.g., handling statement and net 
weight) that are generically approved by the Agency. FSIS will only 
evaluate the special statement or claim that is presented on the label.
    Under the proposal, statements on labels that are defined in FSIS's 
regulations or policy guidance, e.g., a statement that characterizes a 
product's nutrient content, such as ``low fat;'' that has geographical 
significance, such as ``Italian Style;'' or that makes a country of 
origin statement on the label of any meat or poultry product ``covered 
commodity,'' will not need to be submitted to FSIS for evaluation. 
Similarly, if this proposal is adopted, FSIS will not view the addition 
of an allergen statement (e.g., ``contains soy'') applied in accordance 
with the Food Allergen Labeling and Consumer Protection Act as a 
special statement or claim that requires sketch approval. The 
application of statements of this type are clearly prescribed in an 
FSIS compliance policy guide (https://www.fsis.usda.gov/Regulations_&_Policies/Labeling_Allergens/index.asp).
    Through its prior label approval system, FSIS is aware that most 
establishments are voluntarily applying allergen statements to meat and 
poultry product labels in accordance with the Agency's compliance 
policy guide on the use of statements of this type.\3\ FSIS plans to 
continue to monitor the application of allergen statements, but as long 
as the Agency continues to observe the widespread application of 
allergen statements on a voluntary basis, FSIS will not initiate 
rulemaking to make allergen statements a required label feature. FSIS 
intends to continue to use its post-market surveillance activities to 
ensure that labels containing statements of this type are not false or 
misleading and comply with all applicable Federal regulations.
---------------------------------------------------------------------------

    \3\ Source: FSIS Labeling and Program Delivery Division, Label 
Audit, 2010.
---------------------------------------------------------------------------

    The proposed rule will affect several other sections in the meat 
and poultry inspection regulations that reference label approval or 
generically approved labels. 9 CFR 317.8(b)(32)(ii) requires the 
submission of labels bearing calendar dates, e.g., ``sell by date.'' 
FSIS is proposing to amend this section by removing the reference to 9 
CFR 317.4 for submitting labels for approval because FSIS no longer 
believes that labels with these types of phrases need to be submitted 
before use. The use of phrases relating to calendar dates is prescribed 
in FSIS regulations, and industry has been applying these types of 
labeling statements for years.
    FSIS is proposing to revise the recordkeeping requirements for 
product labels, formulation, and processing procedures that are 
described in 9 CFR 320.1(b)(11) by removing the references to 9 CFR 
317.4 and 317.5 and replacing them with a reference to the new label 
approval regulations for meat and poultry found in 9 CFR part 412.
    9 CFR 327.14(c) in FSIS's regulations on meat imports references 
label approval by FSIS in accordance with 9 CFR part 317. FSIS is 
proposing to revise 9 CFR 327.14(c) to reference the new label approval 
regulations in 9 CFR part 412.
    FSIS is proposing to remove the reference to 9 CFR 317.4 in 9 CFR 
331.3(e) and to replace it with a reference to 9 CFR part 412. The 
Agency is also proposing replace the outdated references to the 
``Labels and Packaging Staff, Meat and Poultry Inspection'' in these 
regulations with ``FSIS labeling program at headquarters.''
    In regard to the poultry label regulations and the use of the term 
``fresh,'' FSIS is proposing to amend 9 CFR 381.129(b)(6)(i) to remove 
the reference to the current generic label regulations. Because the 
requirements for the use of the term ``fresh'' are prescribed in FSIS's 
regulations, and the term has been used by industry for a number of 
years, FSIS does not consider it any longer to be a special statement 
or claim. Therefore, under the proposed rule, establishments will be 
able to use the term on labels without submitting the labels for 
evaluation, provided the use of this term is consistent with the 
provisions of 9 CFR 381.129(b)(6)(i).
    Similar to the meat inspection regulations, 9 CFR 381.129(c)(2) 
requires the approval of phrases with regard to calendar dates on 
poultry products. FSIS is proposing to amend this regulation by 
removing the reference to 9 CFR 381.132 for label approval because FSIS 
considers it no longer necessary to require pre-market approval of the 
labels on which these types of phrases appear. The use of phrases 
relating to calendar dates is prescribed in FSIS poultry regulations, 
and FSIS published several years ago a comprehensive set of guidance 
material on poultry dating (https://www.fsis.usda.gov/PDF/Labeling_Guide_on_Poultry_Food_Dating.pdf). Thus, ample guidance exists for 
manufacturers to ensure that the labels on which such information is 
placed are truthful and not misleading without the need to submit such 
labels to FSIS first for pre-market evaluation.
    FSIS is proposing to eliminate the requirement that any label 
bearing the USDA approved quality control system logo, and any wording 
or explanation with respect to the logo, be approved. The logo is 
illustrated clearly in the regulations, and its use is prescribed as 
well. As such, FSIS does not believe that labels bearing the logo need 
to be submitted for approval. If this proposal is adopted, 9 CFR 
318.4(f) and 381.145(f) will be amended to remove the references to 
``parts 316 and 317 of this chapter'' and ``subparts M and N,'' 
respectively.
    FSIS is proposing to revise the recordkeeping requirements for 
product labels, formulation, and processing procedures described in 9 
CFR 381.175(b)(6) to remove the references to 9 CFR 381.132 and 
381.133. These references will be replaced with a reference to the new 
label approval regulations found in 9 CFR part 412.
    For the same reason, FSIS is proposing to replace the references to 
9 CFR 381.132 and 381.133, which discuss the approval of marks and 
other labeling for use on immediate containers of imported products, in 
9 CFR 381.205(c) with a reference to 9 CFR part 412.
    The Agency is also proposing to amend 9 CFR 381.222(d)(1) to remove 
the reference to 9 CFR 381.132 for label approval and to replace it 
with a reference to 9 CFR part 412. As with 9 CFR 331.3(e) and 
331.3(e)(1), the Agency is proposing to replace the outdated references 
to the ``Labels and Packaging Staff, Meat and Poultry Inspection'' in 9 
CFR 381.222(d)(2) and (3) with one to the ``FSIS labeling program at 
headquarters.''
    In regard to other FSIS regulations, FSIS is proposing to amend 
footnote 3 in the table of approved substances (9 CFR 424.21(c)) to 
replace the old references for label approval to 9 CFR 317.4 and 381.32 
(which should have actually been 9 CFR 381.132) with a reference to 9 
CFR part 412.
    Finally, FSIS is proposing to amend 9 CFR 424.22(c)(4), which 
discusses the need for the approval of labels of irradiated meat and 
poultry products, by removing the references for label approval in 9 
CFR 317.4 and subparts M and N in part 381. Because the requirements 
for the labels of irradiated

[[Page 75815]]

products are prescribed in FSIS's regulations, and the term has been 
used by industry for a number of years, FSIS no longer considers it to 
be a special statement or claim that requires submitting such labels 
for approval.

Options Considered for This Proposal

    FSIS considered several options in developing this proposed rule. 
The first option FSIS considered was to maintain the current prior 
label approval system. Under this option, FSIS would not modernize its 
regulations by increasing the types of labels that the Agency considers 
generically approved and would not streamline its regulations by 
combining the label approval regulations for meat and poultry into one 
location in Title 9. Under this option, establishments and certified 
foreign establishments would not have to change any procedures and 
could continue to apply certain types of generically approved labels as 
provided for in the regulations. Therefore, FSIS would not need to 
allocate its resources to conduct rulemaking.
    However, there are several major disadvantages to this option. 
First, the option would not be consistent with the Agency's commitment 
to enable manufacturers to make decisions and assume more 
responsibility concerning whether products that they produce are 
compliant with FSIS labeling regulations. Our current generic label 
rule was intended to reduce the number of labels and other labeling 
that are submitted for evaluation by FSIS and to lessen the paperwork 
burden on official establishments. The goal was to improve efficiency 
by streamlining the label evaluation and approval process. Streamlining 
and modernizing the prior label approval process is important to the 
Agency so that it can better focus on and direct its resources to other 
consumer protection and food safety activities.
    Second, the regulations for the mandatory label features have been 
in place for decades, and FSIS believes that, as a result of its 
verification activities, establishments and certified foreign 
establishments can effectively apply labels with the mandatory label 
features without submitting them for approval to the Agency. 
Consequently, under this option, industry would continue to need to 
submit a significant number of labels for evaluation and approval 
because parts of the generic label regulations are unnecessarily 
restrictive. Specifically, the regulations require establishments to 
submit labels for evaluation that do not present policy issues from the 
standpoint of food safety, health, economic adulteration, or 
misbranding.
    The second option that FSIS considered was: (1) Amending its 
regulations so that all labels, including labels for temporary approval 
and labels bearing claims, would be considered generically approved by 
the Agency; and (2) streamlining its regulations by combining the label 
approval regulations for meat and poultry in one location in Title 9. 
The primary advantages of this option are that it would streamline the 
Agency's label approval regulations and eliminate the burden on 
industry to submit labels to the Agency for approval. However, a major 
disadvantage of this option is that it would likely result in 
misbranded products in the marketplace. While the results of the 
generic labeling survey showed success in establishments applying 
certain types of labels (e.g., the mandatory features that have been 
required by the meat and poultry inspection regulations for decades), 
the results of the survey cannot be used to support the generic 
approval of all labels because certain types of labels, e.g., labels 
with special statements and claims, present significant policy issues 
and are not defined in FSIS regulations. Consequently, establishments 
may not be familiar with the Agency's requirements for the support or 
application of certain special statements or claims, which could result 
in increased labeling errors and misbranded product.
    Industry is familiar with the requirements for mandatory label 
features, but the Agency believes that it needs to continue to provide 
pre-market evaluation and approval of certain types of labels (e.g., 
temporary approvals and labels for product produced under a religious 
exemption). Further, FSIS needs to continue to provide pre-market 
evaluation and approval of special label statements and claims (e.g., 
animal production raising claims and ``natural'') that present 
significant and evolving policy issues. The pre-market evaluation and 
approval of certain types of labels, and special statements and claims 
intended for use on labels, are needed for the Agency to verify that 
all labels are accurate, truthful, and not misleading before products 
enter commerce.
    The third option FSIS considered was to: (1) Expand the types of 
labels that would be subject to generic approval; and (2) streamline 
its regulations by combining the label approval regulations for meat 
and poultry in one location in Title 9 of the CFR. Under this option, 
FSIS would expand the types of labels that the Agency considers 
generically approved (i.e., any labels that bear mandatory features 
without special statements or claims). The Agency would continue to 
require the submission of certain types of label, e.g., labels for 
temporary approval, labels for export products with label deviations, 
and products produced under religious exemptions.
    Under this option, Federal establishments and certified foreign 
establishments would be responsible for ensuring that the basic 
required features on labels are applied in accordance with all 
applicable regulations. Temporary approvals, labels for export products 
that deviate from domestic labeling requirements, and labels for 
products produced under religious exemption, however, would represent 
exceptions that FSIS would need to evaluate on a case by case basis. 
Therefore, these limited types of labels would have to be submitted to 
FSIS for evaluation and approval before use. In addition, manufacturers 
would be required to submit special statements and claims intended to 
be used on labels to the Agency for approval under this option.
    A major advantage of the third option is that establishments would 
be responsible for developing labels that include the basic mandatory 
features (i.e., product name, safe handling statement, ingredients 
statement, signature line, net weight, legend, safe handling 
instructions, and nutrition labeling) in accordance with Federal 
regulations. This option would thus allow Agency personnel to focus 
their efforts on evaluating claims or special statements that have 
consumer safety or economic implications and on labels that cannot be 
generically approved, e.g., requests for temporary approval to use 
labeling that is deficient in some manner. It would substantially 
reduce the types of labels that would need to be submitted to the 
Agency, thus reducing, although not entirely eliminating, the burden 
for industry to submit labels to FSIS for approval.
    FSIS would continue to perform verification and post-market 
surveillance activities in commerce to ensure that meat and poultry 
product labels comply with all applicable regulations. Specifically, 
FSIS would select samples of generically approved labels from the 
records maintained by official establishments and establishments 
certified under foreign inspection systems, in accordance with part 327 
and part 381, subpart T, to determine compliance with label 
requirements. If the Agency found that an establishment is using a 
false or misleading label, it would institute the proceedings 
prescribed in 9 CFR 500.8

[[Page 75816]]

to revoke the approval for the label. FSIS's surveillance activities 
would ensure that the consumer is protected under this option.
    Therefore, FSIS concludes that the third option is the most 
feasible for rulemaking. It is an approach that will effectively 
enhance implementation of a generic label system that imposes less 
burden on industry. It promotes effective use of Agency resources. The 
option will not adversely affect consumer protection because FSIS will 
continue to evaluate labeling, e.g., special statements and claims and 
requests for temporary approval, that have consumer safety or economic 
implications. Moreover, FSIS will continue its verification and 
compliance activities to ensure that establishments are labeling their 
products in conformance with Agency regulations. Finally, it will 
streamline FSIS regulations by putting the meat and poultry prior label 
approval regulations in one part in Title 9.
    We invite public comment on these options as well as on other 
options not discussed above.

Executive Orders 12866 and 13563

    Executive Orders (EOs) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if a 
regulation is necessary, to select the regulatory approach that 
maximizes net benefits (including potential economic, environmental, 
public health and safety, and other advantages, distributive impacts, 
and equity). Executive Order 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. This action has been reviewed for 
compliance with EOs 12866 and 13563.
    This rule has been designated a ``significant regulatory action,'' 
although not economically significant, under section 3(f) of EO 12866. 
Accordingly, the rule has been reviewed by the Office of Management and 
Budget.
    The Agency has determined that this proposed rule maximizes net 
benefits to consumers and establishments by expanding the types of 
labels that are approved generically under the FMIA and the PPIA.

I. Need for the Rule

    The purpose of the proposed rule is to expand the circumstances in 
which the labels of meat and poultry products will be deemed to be 
generically approved by FSIS and to combine the regulations that 
provide for the generic approval of labels for meat products into a new 
part 412 in Title 9, Chapter III, of the CFR. The proposed rule is the 
next step in the Agency's gradual streamlining and modernizing of the 
prior label approval system.
    This rulemaking's intent is to reduce the number of labels 
evaluated by FSIS that only bear basic features (e.g., product name, 
ingredients statement, net weight) and to reduce the amount of 
paperwork filed by establishments with FSIS. If finalized, these 
actions will improve the efficiency of the label approval system by 
streamlining the evaluation process for specific types of labels and 
making the label approval system more convenient and cost-effective for 
industry. As for consumers, this new process will enhance market 
efficiency by promoting a faster introduction of new products into the 
marketplace to meet demand while not negatively affecting consumer 
protection from misbranded product.

II. Historical Record of FSIS's Prior Label Approval System

    In 1983, when FSIS established limited types of generically 
approved labels, the Agency evaluated 130,000 labels. In 1991, the 
number of labels evaluated peaked at 167,500 labels. The 1995 final 
rule that amended the prior label approval system expanded the types of 
labels and label changes that may be applied in accordance with the 
generic label regulations. As a result, the number of labels evaluated 
by FSIS decreased by 74 percent to 43,255 in 2003, as depicted in 
Figure 1. From 2003 to 2010, the number of labels evaluated per year 
averaged 57,457, with a minimum of 43,255 (2003) and a maximum of 
66,061 (2010).
[GRAPHIC] [TIFF OMITTED] TP05DE11.000

    Source: FSIS, Labeling and Program Delivery Division (LPDD), 
Labeling Information System (LIS) Database

    Under the current prior label approval system, FSIS evaluates and 
approves meat and poultry labels for temporary or sketch approval. 
Labels are not approved when they do not comply with Federal 
regulations, or when they have claims and special statements that are 
not substantiated or supported with sufficient documentation. As 
depicted in Figure 2, sketch labels make up over 50 percent of the 
volume of labels evaluated and approved by FSIS, while

[[Page 75817]]

the approval of temporary labels makes up only about 9 percent of the 
total volume.
[GRAPHIC] [TIFF OMITTED] TP05DE11.001

    Source: FSIS, LPDD, LIS Database

    During 2003-2010, FSIS reviewed and evaluated a total of 459,656 
labels. As depicted in Figure 3, the number of labels reviewed and 
evaluated by FSIS LPDD increased 53 percent, from 43,255 labels in 2003 
to 66,061 labels in 2010. Each year the number of labels increased, 
except between 2004 and 2005, when labels decreased 4 percent, from 
56,344 labels to 54,100 labels, but then increased 4 percent to 56,102 
labels in 2006.
[GRAPHIC] [TIFF OMITTED] TP05DE11.002

    Source: FSIS, LPDD, LIS Database

    When looking at the data of the Agency approval of Temporary Labels 
(See Table 1), we find that the approval level was at 13 percent in 
2003 (5,831 labels approved), which then declined to 6 percent in 2010 
(4,101 labels approved). The approval level was at its lowest in 2010 
(6.2%), when the Agency approved 4,101 labels out of 66,061 labels. 
Since 2003, the Agency has approved 45 percent more sketch labels and 
30 percent fewer temporary labels.

[[Page 75818]]



                                                Table 1--Label Evaluation and Approval Process, 2003-2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  Agency action                       2003         2004         2005         2006         2007         2008         2009         2010
--------------------------------------------------------------------------------------------------------------------------------------------------------
Temporary Approval..............................        5,831        6,124        5,036        4,763        4,404        4,369        4,575        4,101
                                                        (13%)        (11%)         (9%)         (8%)       (7.5%)       (8.8%)       (7.2%)       (6.2%)
Sketch Approval.................................       25,870       36,967       32,795       32,956       32,588       21,693       35,588       37,465
Unapproved......................................       11,554       13,252       16,269       18,383       21,250       23,456       23,284       24,495
                                                 -------------------------------------------------------------------------------------------------------
    Total.......................................       43,255       56,343       54,100       56,102       58,242       49,518       63,447       66,061
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Examining the data closer, the number of sketch labels approved 
increased 64 percent, from 21,693 labels in 2008 to 35,588 labels in 
2009, while the number not approved remains the same and the number of 
temporary slightly increased. The number of labels not approved has 
climbed steadily from 2003, when it was at its lowest at 11,554 labels 
unapproved, to its high of 24,495 labels not approved in 2010. Between 
2005 and 2007, as the number of sketch label approvals leveled off in 
the 32,000 range, the number of labels not approved increased 30 
percent, from 16,269 labels to 21,250. FSIS attributes this increase in 
labels not approved to the increase in special claims, statements that 
were not substantiated, and sketch labels that Agency personnel could 
not approve as modified because the labels contained several errors or 
major discrepancies. During this timeframe, FSIS placed much of its 
labeling guidance on its Web site and conducted many labeling 
workshops.

III. Industry Profile

A. Establishments

    Based on the Agency's Performance Based Inspection System 
databases, in 2011, there were about 6,099 Federal establishments. FSIS 
estimates that there were approximately 266,061 approved meat and 
poultry product labels used by these establishments. FSIS evaluated 
66,061 of them in 2010; the remaining 200,000 were approved under the 
Prior Label Approval System because they met the standards for generic 
approval.

B. Label Consultant Firms

    There are about 12 firms that submit labels to LPDD on behalf of 
Federal establishments. These firms provide label courier service, 
information, and training to their clients on FSIS labeling policies. 
All of the firms in this industry are small, usually having one to four 
employees. Many of these firms now offer consulting services, such as 
ensuring that import and export labels to be reviewed for compliance 
with USDA regulations receive expedited service and providing label 
outsourcing, in which a firm handles all of an establishment's food 
labeling needs.

IV. Benefits

A. Industry

    If adopted, the proposed rule will continue the streamlining and 
modernization of the Agency's prior label approval system. The proposed 
rule will permit establishments to realize an estimated cost savings of 
a minimum of $8.7 million (discounted over a 10-year period) for 
generically approving about 584,486 additional labels over a 10-year 
period at about $25 per label submission.\4\ In the absence of the 
proposed rule, establishments will not realize any cost savings because 
Federal regulations will continue to require establishments to submit a 
significant number of labels to LPDD for evaluation.\5\ Establishments 
will also realize an increase in the number of generically approved 
labels over a 10-year period under the proposed rule.
---------------------------------------------------------------------------

    \4\ The cost per label is the cost of submitting a label for 
review to FSIS, which averages about $25.00 per submission. This 
amount will be used as a proxy to estimate the cost savings to 
establishments that prepare their labels for review using FSIS Form 
7234-1 ``Application for approval of Labels, Markings, or Device'' 
and preparing a printer's proof of the label for evaluation and 
approval by LPDD.
    \5\ See Table 2.

                                             Table 2--Estimated Establishment Cost Savings (in 2010 Dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           (A)                                  (B)             (C)             (D)             (E)             (F)             (G)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Increase in
                                                           Total number      number of     Total number     Total cost
                                                             of labels        labels         of labels        savings
                                                           developed and   developed and   developed and  Col.(C) x *$25     To apply       Discounted
                          Year                              applied by      applied by      applied by     from reduced    discount rate    total cost
                                                          establishments  establishments  establishments   need for FSIS     of 7.00%      savings col.
                                                            that do not   that would not  that would not       label                      (E) x Col. (F)
                                                           require FSIS    require FSIS    require FSIS     evaluation
                                                            evaluation      evaluation      evaluation
                                                            Before rule                     After rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.......................................................         200,000               0         200,000              $0            1.00              $0
1.......................................................         250,985          50,985         301,970      $1,274,625            0.93      $1,185,401
2.......................................................         253,495          52,515         306,009      $1,312,864            0.86      $1,129,063
3.......................................................         256,030          54,090         310,120      $1,352,250            0.79      $1,068,277
4.......................................................         258,590          55,713         314,303      $1,392,817            0.72      $1,002,828
5.......................................................         261,176          57,384         318,560      $1,434,602            0.65        $932,491
6.......................................................         263,788          59,106         322,893      $1,477,640            0.58        $857,031
7.......................................................         266,426          60,879         327,304      $1,521,969            0.51        $776,204
8.......................................................         269,090          62,705         331,795      $1,567,628            0.44        $689,756
9.......................................................         271,781          64,586         336,367      $1,614,657            0.37        $597,423
10......................................................         274,499          66,524         341,022      $1,663,097            0.30        $498,929
                                                         -----------------------------------------------------------------------------------------------

[[Page 75819]]

 
    Total...............................................       2,825,858         584,486       3,410,344     $14,612,147  ..............      $8,737,404
--------------------------------------------------------------------------------------------------------------------------------------------------------
Description:
Col A: Estimate is for a 10-year period. Year ``0'' is the year before the enactment of the rule.
Col B: Total number of labels developed and applied by official establishments that do not currently require FSIS evaluation.
Col C: Increase in the number of labels generically developed and applied by establishments as a result of the rule (i.e., would not need FSIS
  evaluation.
Col D: Total number of labels developed and applied by establishments after the rule was enacted.
Col E: Total cost savings realized to establishments, using an estim